Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets...
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Accounting
Calculating Net Cash Flow from Operating Activities (Indirect Method)
Lincoln Company owns no plant assets and reported the following income statement for the current year:
Sales
$755,000
Cost of Goods Sold
$470,000
Wages Expense
110,000
Rent Expense
42,000
Insurance Expense
15,000
637,000
Net Income
$118,000
Additional balance sheet information about the company follows:
End of Year
Beginning of Year
Accounts Receivable
$54,000
$49,000
Inventory
60,000
66,000
Prepaid Insurance
8,000
7,000
Accounts Payable
22,000
18,000
Wages Payable
9,000
11,000
Use the information to
a.
Calculate the net cash flow from operating activities under the indirect method.
$Answer
b.
Compute Lincoln Company's operating cash flow to current liabilities (OCFCL) ratio. (Assume current liabilities consist of accounts payable and wages payable.)
(Round your answer to two decimal places.)
Answer
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